From 6 July 2016 to 6 August 2016, the Securities Industry Council (the “SIC”) is seeking comments on its proposals to revise the Singapore Code on Take-overs and Mergers (the “Code”). Among other changes, the SIC consultation paper contains proposals that will address issues where there are competing offers and encourage the board of directors of the offeree company to be more proactive in helping the offeree shareholders to consider a take-over offer.

Competing offers

  • The SIC proposes to introduce a new auction procedure, modelled after the auction procedure codified by the Panel on Takeovers and Mergers in the UK, to ensure an orderly conclusion to a competitive situation that exists in the later stages of the offer period.
  • In a case where an offeror has announced a firm intention to make an offer (the “First Offeror”) and there is a possibility of a potential competing offeror, the deadline for which the potential competing offeror must clarify its intention to announce a firm intention to make a competing offer, or otherwise, would be extended from Day 50 to Day 53 from the date the First Offeror despatches its initial offer document.
  • The SIC proposes to clarify in the Code that in a competitive situation, all offerors will generally be bound by the timetable established by the despatch of the offer document of the latest competing offeror.

Offeree Board’s conduct during offer

  • The SIC will clarify that an offeree Board may solicit a competing offer or conduct a sale process during the offer period, and such actions will not constitute a frustrating act under Rule 5 of the Code.
  • To encourage the offeree Board to take a more proactive role in helping the shareholders to consider a take-over offer, the Code will expressly provide that the offeree Board may consider sharing with the independent financial adviser any management projections and forecasts to enable the adviser to advise on the offer.

Please refer to the materials set out below for more proposed changes to the Code which are set out in the SIC consultation paper.

Reference materials

The following materials are available on the MAS website www.mas.gov.sg: